Dooner v Fahy
| Jurisdiction | Ireland |
| Judge | Mr. Justice Dignam |
| Judgment Date | 26 April 2024 |
| Neutral Citation | [2024] IEHC 250 |
| Court | High Court |
| Docket Number | [Record No.] 2022/82 MCA |
In the matter of Part 47 of the Taxes Consolidation Act 1997 as amended by the Finance (No. 2) Act 2008
[2024] IEHC 250
[Record No.] 2022/82 MCA
The High Court
Judgment of Mr. Justice Dignam delivered on the 26 th day of April 2024 .
This is my judgment in respect of the following two applications:
(i) an application brought by way of Originating Notice of Motion by the applicant, a Revenue Officer, for the imposition of a civil penalty in respect of the respondent's alleged failure to make income tax and VAT returns for specified years. The relief sought is, inter alia:
“1. A determination pursuant to Section 1077B(3) of the Taxes Consolidation Act, 1997 as inserted by the Finance (No.2) Act, 2008 that the Respondent herein is liable to a penalty of €88,872 pursuant to Section 1077E(3) of the Taxes Consolidation Act, 1997 and Section 116(3) of the Value Added Tax Consolidation Act, 2010 in circumstances where the respondent deliberately failed to deliver a return of income, charges and capital gains in relation to income tax for the tax years 2015, 2016, and 2017 and the Respondent deliberately failed to deliver VAT returns for the taxable periods from the 1 st January 2015 to the 31 st December 2017;
2. Such further or other Order pursuant to Section 1077C of the Taxes Consolidation Act, 1997 as inserted by the Finance (No.2) Act, 2008 regarding recovery of the penalties in the combined amount of €88,872 the subject matter of this application.”
(ii) An application brought by Notice of Motion in these proceedings by the respondent for:
“ 1. A WRITTEN ORDER FROM THE HIGH COURT: Dismissing the Applicant's groundless application in its entirety, for reasons stated herein and reasons stated in the Respondent's Replying/Grounding Affidavit.
2. A WRITTEN ORDER FROM THE HIGH COURT: Endorsing the Respondent's RESCISSION of the prosecutions (sic) purported CERTIFICATE OF CONVICTION from Trim Circuit Court, as the Certificate was unlawfully obtained by the Prosecution's lack of Subject Matter Jurisdiction, use of Coercion, the Threat of Imprisonment, and the failure of the prosecution to clearly establish any intention to commit a Crime and/or any act of criminality (Mens Rea/Actus Reus).
3. AN ORDER FROM THE HIGH COURT: Ordering the Revenue Commissioners to return the €26,484.12 they stole from the Respondent, by way of an Alleged Attachment order, with the unlawful assistance of Allied Irish Bank, who were coerced by the said Revenue Commissioners, which was carried out in the absence of a Court Order.
4. An Order for Costs/Expenses ongoing, and such further/other Orders as the Court shall deem appropriate.
5. In the alternative to Orders 1, 2 and 3 referenced herein: AN ORDER FROM THE HIGH COURT: To refer this and all matters referred herein to the Supreme Court of Ireland on Points of Law, which are to be drafted on agreement/consent of all parties concerned and to the Respondents complete satisfaction.” [Emphasis in the original]
It is apparent from the respondent's Notice of Motion that his application is a mixture of a defence to the applicant's application and an application for separate and distinct relief; for example, the first relief is simply an Order dismissing the applicant's application. This approach is also reflected in the affidavit sworn by the respondent at the time of issuing his motion. The affidavit is headed “ Replying Affidavit of Michael Fahy” but in paragraph 2 it is described as both grounding the Notice of Motion and as being “ a Replying Affidavit to the Application of the Applicant and the Affidavit/Supplemental Affidavit of the applicant Deponent/Affiant Siobhan Dooner.”
The respondent also issued a motion seeking leave to cross-examine the applicant on her affidavits. This also came before me on the hearing date for the above two motions. Before considering those motions (other than the papers being opened to me, which was necessary in order to consider the application for leave to cross-examine), I determined the application for leave to cross-examine and refused to grant leave. I gave a summary of my reasons for that decision and said that I would give my full reasons in this judgment. I will do so after dealing with the other two motions as the reasons will be more clearly understood when the facts in respect of the parties' other respective applications are set out.
I propose to set out the affidavit evidence and then deal with the applicant's motion first and in doing so will also deal with those parts of the respondent's Notice of Motion and affidavits which comprise a response or defence to her application. I will then deal with the respondent's application insofar as it seeks specific relief. I will then give the reasons for my decision in respect of the respondent's application for leave to cross-examine the plaintiff.
In her grounding affidavit the applicant deposes to the following matters.
The respondent, Mr. Fahy, registered for Income Tax as a self-employed Sales Consultant on 6 th April 1997 and for VAT on the 1 st January 2009. The last Income Tax return filed by the respondent was for the tax year 2008 and the last VAT return had been submitted for the period of January/February 2010.
The respondent had acted as a self-employed sales agent for two-third party limited liability companies.
The respondent did not file income tax or VAT returns for the periods 2015, 2016 or 2017 and by notification of Revenue Investigation dated 25 th March 2019, the Respondent was informed that all of his taxes and duties, including income tax and VAT, from the 1 st January 2015 to the 31 st December 2017 were to become the subject of an investigation.
The respondent was advised that the investigation would take place on the 16 th April 2019 at 10:30am in the Navan Office of the Revenue Commissioners and he should bring with him all records including linking documentation for the above specified periods, inclusive of a copy of his contract with the two limited liability companies.
The respondent did not attend the meeting and did not contact the Revenue Commissioners to inform them that he would not be attending or to reschedule the meeting and, by letter dated 16 th April 2019, the Revenue Commissioners wrote to him informing him that based on his non-attendance at the meeting, another meeting had been scheduled for 25 th April 2019 at 10:30am at the same office with the request that the same documentation be brought. He did not attend that meeting either and did not make contact with the Revenue Commissioners in relation to it.
The Revenue Commissioners then sought and obtained information regarding sums paid to the respondent by the two companies for whom he had acted as a self-employed sales agent (made up of sales commissions plus VAT) from the tax agent for those companies.
By letter of the 29 th July 2019 the respondent was served with a notice pursuant to section 900 of the 1997 Act to produce certain documentation and information within twenty-one days. He did not do so. On the 23 rd August 2019, the Revenue Commissioners issued a letter pursuant to section 906A of the 1997 Act to the effect that if he did not produce specified documentation (bank statements) within ten days, section 906A notices would issue to the respondent's financial institutions. He did not produce that documentation or information and a notice was served on the respondent's financial institution on the 2 nd October 2019. Information was provided by the financial institution.
By Notices of Assessment dated 26 th November 2019, the applicant raised Income Tax Assessments in respect of the periods 2015, 2016 and 2017 totalling €55,711.42 and by Notices of Assessment of the 20 th December 2019 she raised VAT assessments for those periods totalling €37,161.
These assessments were not appealed by the respondent. It is worth pausing at this stage to note that the 1997 Act provides that a person may appeal against any assessment to income tax and in default of doing so the assessment made on the person shall be final and conclusive. The 2010 Act similarly provides that a person may appeal against any assessment to VAT and in default of doing so the assessment is final and conclusive (see, for example, section 933 and 959AF of the 1997 Act and section 111 of the 2010 Act).
The respondent was issued with a Notice of Opinion pursuant to section 1077B of the 1997 Act dated the 24 th March 2020 and a further Notice of Opinion dated 12 th August 2021. He was then issued with an Amended Notice of Opinion of the 5 th October 2021 which supersedes those earlier Notices of Opinion.
The Amended Notice of Opinion dated 5 th October 2021 set out, inter alia, the opinion that the respondent was “ liable to a penalty pursuant to Section 1077E of the Taxes Consolidation Act 1997 and Section 116 of the Value Added Tax Consolidation Act, 2010” and the circumstances in which he was said to be liable to the penalty were stated as:
“ You deliberately failed to deliver Income Tax returns for the tax years 2015, 2016 and 2017 and VAT returns for the periods 01/01/2015 to 31/12/2017. The tax liabilities have been quantified and assessed. The amount of the difference is €88,872. Furthermore, you failed to pay the tax arising.”
The notice also expressed the opinion that the amount of the penalty was 100% of the difference between the tax paid (zero) and the amount that should have been paid (€88,872). It also requested that the respondent agree in writing with the opinion and in the event he did not agree “…AND make a payment of the amount of the penalty as set out above within 30 days after the date of this notice an application to the appropriate Court may be made by the Revenue...
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